Libyan owned UTL suffers defeat in court

One of the frozen assets owned by Gadaffi Libya, Uganda Telecom, has suffered a severe blow in court yesterday, when the Commercial Court delivered judgment on a pending suit brought by telecoms giant MTN against UTL over ‘interconnection fees’.

Once one of Uganda’s most promising companies, after being privatized from the former Uganda Post and Telecommunication Corporation, UTL made swift inroads into the market then dominated by MTN, and was the first to introduce a country wide 3G mobile internet network alongside their GSM communications.

However, when Gadaffi’s Libya bought into the company, amongst promises of added capital injections and turning UTL into the leading telecoms company, things began to change. The introduction of hapless Libyan appointed managers left locals stunned, and when no further money was availed to expand and further modernize the company’s network, customers became frustrated and migrated to new arrivals on the scene like Orange or returned to re-join the Airtel network which had taken over Celtel/Zain.

The court order yesterday most notably settled UTL’s call links to Southern Sudan, where in agreement with a Juba based telecoms company they permit the use of Uganda’s +256 international access code, to ensure calls would not need to route via Sudan’s +249 access code entering the country in Khartoum, where monitoring and call tapping is a happy occupation of the regime’s security agents.

Court rejected UTL’s argument that there were ‘international’ calls and upheld MTN’s argument that the use of Uganda’s international prefix clearly indicated they were local calls, with subsequently much higher interconnection fees becoming due.

UTL now has to immediately pay almost 10 billion Uganda Shillings to MTN unless they would risk a nearly 20 percent interest penalty, and with Libyan shares frozen and Libya’s financial assets unavailable, the erstwhile deep pockets of Gadaffi will no longer be able to come to UTL’s assistance.

A source overnight suggested that this could financially severely impact on UTL’s operations and the coming weeks will tell just how well they will cope. Meanwhile though, visitors to the country have plenty of choices left to hook up to a local network, with MTN, Orange, Airtel and Warid offering the widest options for voice calls while Orange, MTN and Airtel in addition offer 3+G mobile internet connections through attractively prices USB modems to allow foreign visitors to stay in touch with family, friends and business.

In a related development is the case for the winding up of RwandaTel coming up in a Kigali court shortly, where Libya’s telecom interest has suffered a crushing setback when an official receiver was installed by court last week, indicating that the company is heading for an officially ordered winding up, rendering Gadaffi’s multi million US Dollar investments worthless.